North Dakota soybean farmers fear Canada will take market share after canceled Chinese contracts
- Soybean farmers in Canada, Russia and Brazil could take market share from North Dakota farmers with recent canceled contracts from Chinese buyers.
- "There's a lot at stake," says Simon Wilson, executive director of the North Dakota Trade Office.
Canada might soon be reaping the benefits from the recent string of canceled soybean contracts, Simon Wilson, executive director of the North Dakota Trade Office, told CNBC.
"The big competitor for us is Canada," Wilson told CNBC's Contessa Brewer on Friday's "Power Lunch." "They have similar weather, similar production cycle. And for us, we’ve always been competing with them.
But now, after Chinese buyers canceled all of their firm orders for food-grade soybeans earlier this month, the competition might heat up. The scrapped contracts amount to a loss of $1.2 million to $1.5 million, but that's a small portion of North Dakota's $30 million to $35 million in annual contracts, which are usually finalized in the summer months.
Wilson said Chinese trade delegations, previously scheduled for September, have gone "radio silent on us."
"There’s a lot of money in this," he said. "It’s a big market. China’s a massive market for soybeans."
"And these contracts, you know, these are the ones that live through the rest of the winter and so on," Wilson said. "We’re really now at a point where if they don’t get locked in, we don’t know where we’re going to put these beans."
"There's a lot at stake," he said.
In addition to Canada, Wilson said other countries that might swoop in and take market share are Russia and Brazil.
"They’re the ones that are really starting to play the game and really getting in there hard," he said.
"We don’t mind competing," he said. "But it’s when you put us out on the sidelines that’s when it gets real tough for us."